Investors with an interest in Agriculture - Operations stocks have likely encountered both Corteva, Inc. (CTVA) and Limoneira (LMNR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Corteva, Inc. is sporting a Zacks Rank of #2 (Buy), while Limoneira has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CTVA has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CTVA currently has a forward P/E ratio of 24.48, while LMNR has a forward P/E of 257.93. We also note that CTVA has a PEG ratio of 1.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LMNR currently has a PEG ratio of 17.20.
Another notable valuation metric for CTVA is its P/B ratio of 1.40. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LMNR has a P/B of 1.51.
These metrics, and several others, help CTVA earn a Value grade of B, while LMNR has been given a Value grade of D.
CTVA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CTVA is likely the superior value option right now.
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